Short Takes: April 26, 2013

In the wake of Microsoft’s stellar earnings report last week, the big mystery remains: How well is Windows 8 doing in the market? Microsoft declined to provide the expected license sales figure for the new OS, as was expected, and we’re now looking ahead to a separate announcement, which would be odd, or perhaps something tied to TechEd or another event this spring. But inquiring minds do want to know. On the one hand, the PC market contracted by 12.5 percent (year over year) in Q1 2013, the worst-ever drop. On the other, Windows 8 has apparently snagged 7.4 percent of the market for tablets in the same quarter after owning a whopping 0 percent (yes, you read that right) the previous quarter. So ... what’s the truth? I can say this: Whenever the next milestone is announced, if the average license sales of Windows 8 are found to be less than 20 million units a month—the figure Microsoft had maintained for the entire lifetime of Windows 7—then Windows 8 is a failure. If it is exactly 20 million units—my expectation, by the way—the suspicion and mystery will only continue. More than 20 million? Don’t be silly. That is not possible. Related: "Surprisingly Strong Quarter Suggests Microsoft Transition Is On Track"

Microsoft Prevails in Motorola Patent Fight

US District Judge James Robart ruled this week that Motorola Mobility’s demand that Microsoft pay $4 billion a year in standard-essential patent-licensing fees was dramatically higher than the actual value of the patents, just as Microsoft had argued. And he has decided that the appropriate payment is $1.8 million a year. The ruling is a blow to Google, which purchased Motorola Mobility for $12.5 billion solely for its mobile industry patent portfolio. So far, that’s been a bust, as the ruling lowers the value of those patents in future licensing deals. But don’t worry, Google fans: The firm has another chance to fall flat on its face in court. A second patent battle between the two firms will unfold this summer in which the same judge will decide whether Motorola violated a legal requirement to license its standard-essential patents to Microsoft on fair terms. Hint: Based on this ruling, yes, it did.

Nokia Teases New Phone(s) … or a Tablet? … or a Phablet?

Nokia will host an event in London on May 14 at which it will unveil “what’s next for the Nokia Lumia story.” This vague but enticing tagline suggests a few things. First, it suggests a new phone, of course, since Lumia is the brand Nokia uses for its smartphones. Second, it possibly suggests the long-rumored Nokia tablet, which could also potentially carry the Lumia brand and would thus explain why Nokia is calling this the “Lumia story.” I’d also point out that although many expect Nokia to announce its long-awaited Verizon-based Lumia 920 variant, the Lumia 928, at the show, that almost doesn’t make sense since that device is aimed at just the US market. Why would Nokia only announce a new phone for the United States … in London? My guess: It wouldn’t, and so there must be more coming. And my money is on … a phablet, not a tablet. See, the thing is, Nokia has really expanded its Lumia lineup nicely this year, but the one area where it doesn't compete is in the so-called phablet category. These are the phones with 5" or larger screens, like the Samsung Galaxy Note 2. It just makes too much sense. Related: "A Jump in Lumia Sales Is the Sole Good News in Nokia Earnings"

Nokia Lumia 521 Will Cost Just $150 at T-Mobile with No Contract

Looking for a high-quality but inexpensive smartphone, and not interested in grabbing a two-year-old Android handset at a third-tier local provider? Well, consider this option: T-Mobile will offer the brand-new Nokia Lumia 521—the T-Mobile branded version of the Lumia 520—starting this weekend for just $150. And yes, that’s the price without a contract of any kind. (Caveat: This weekend, the device will be available only from Home Shopping Network, with Microsoft and Wal-Mart offering it starting next month.) The Lumia 521 is a low-end smartphone in price only, sure, but this is an incredible deal for the budget-conscious.

Samsung Continues Spanking Apple in the Smartphone Market

Samsung reported quarterly profits of $6.5 billion, a jump of 42 percent year over year, on revenues of $47.5 billion—up 54 percent. These incredible numbers were attributed mostly to stellar and better-than-expected smartphone sales, particularly of newer models like the Galaxy Note 2. But preorders for the new Galaxy S4, which arrives this quarter, are higher than expected as well, Samsung says, and the firm expects to keep steamrolling its slower-moving competition, particularly Apple. According to IDC, Samsung sold an incredible 71 million smartphones in the first quarter of 2013, roughly double that of Apple. As you might recall, Apple this week reported iPhone sales of 37.4 million units, up just slightly from the 35.1 million in same quarter a year ago. This is the slowest growth the iPhone has experienced in six full years, and two other factors make things look even worse. First, Apple is now selling more and more lower-priced, older iPhone models than ever before, and not its latest model, the iPhone 5. And second, the firm won’t be offering a new iPhone—or any other new product—until the fall. The big news here is that complaints about Samsung’s mix of products—Apple fans like to pretend that Samsung's lead is somehow artificial because of that company’s lower-priced, low-end models—can be made about Apple as well: There’s nothing sadder than watching the company foist a three-year old iPhone 4 on unsuspecting customers in a vain bid to trim ongoing market-share hemorrhage.

"So, Android’s seemingly inexorable ascension over the iPhone? Not quite so inexorable anymore. Apple’s smartphone continues to gain share over devices running Google’s mobile OS in the U.S.; so much so that, according to the Yankee Group, iPhone ownership in the U.S. will exceed Android ownership by 2015. The reason: Platform loyalty." -- John Paczkowski, http://allthingsd.com

Most places that have "free" offers aren't actually giving the phone away for free. When I bought my 8x Tmobile was offering the Galaxy (can't remember which one) for "free". When asking about the details, you have to pay the entire cost for the phone and choose specific (high cost) plans for 6+ months, then they send you a refund. Of course by then you have already paid for the phone anyways. But that was the old Tmobile...

"if the average license sales of Windows 8 are found to be less than 20 million units a month".... "then Windows 8 is a failure."

That statement is overdoing it, Vista could be called a failure, but as Vista was the transition needed to get to Windows 7, Win 8 is the transition needed to get to the next success. It's not like they have to take this failure and rewrite the whole experience, or flush it down the toilet like the did with....

Kin? Now THAT, was a failure. Microsoft Bob? Fail. I admire MS for trying, trying, trying, picking up the pieces and trying again. They are the corporate poster children for persistence.

Windows 7 only sold on PCs. Windows 8 is installed on a growing market for tablets and hybrid devices as well as PCs. If Windows 8 sells fewer licenses than its predecessor despite that, yes, it's a failure.